Insurance
December 26, 2018
By Mary Beth Eastman

Who Needs Life Insurance … and Who Doesn’t?

Simple. Thrifty. Living.

As you reach a certain age, if you are recently married, or if you are starting a family (or all of these), you may be wondering whether or not you should get life insurance. There are quite a few factors you’d want to consider before making a definite decision on life insurance, most importantly your current and future financial status.

If your spouse is financially independent and would be able to recover financially should you suffer an untimely demise, then life insurance might not be an immediate necessity. However, if you also have children that depend on both of you, then that is a consideration as well.

Spouses who need your financial support and children who depend on you are considered dependents. If you have one or more dependents, it is generally a good idea to purchase a life insurance policy so that you can be assured that your dependents will be financially supported even after your death.

Think about all the things that your finances provide, from everyday living expenses to mortgage payments to future college tuition. Choosing the right amount of life insurance can help ensure that all of these things can still be paid for after you’re gone. Additionally, the life insurance policy can also provide your family with money to help cover funeral expenses as well.

Not necessarily, but sometimes you may have debts, such as credit card debts, student loan debts, or even a mortgage. If you do get married in the future, having life insurance can help your future spouse cover those debts. Additionally, your life insurance policy doesn’t necessarily need to go to a spouse or children—the money can be provided to your parents, or even a charity of your choosing. And purchasing life insurance at an early age can save you a significant amount of money on the premiums.

As mentioned above, a spouse can still be a dependent, even if you are a two-income family. If you are a one-income family, the life insurance helps to cover living expenses while your spouse transitions back into the workforce. If you are a two-income family, the life insurance can still be used to help with living expenses, pay off a mortgage, and other financial obligations.

If you do decide to get life insurance, you can easily and quickly calculate how much you might need by multiplying your income by ten, and adding an additional $100,000 for each child. As an alternative, you can also simply add up your current debts and estimated funeral expenses, your mortgage, and college tuition expenses, and add it to your income multiplied by the number of years you think your family might need financial support.

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